Oil prices dip almost 2% as final Iran deal nearing

The oil price slid early on Monday ahead of a deal on Iran’s nuclear program as foreign ministers of Iran and six world powers hold a coordination meeting on Monday. Tehran has 30 million barrels of crude in storage to add to the global oil glut.

Brent futures for August fell 88 cents, or 1.50 percent, trading
at $57.85 a barrel at 13:41 MSK. US light crude West Texas
Intermediate (WTI) was down 64 cents, or 1.21 percent, at $52.10
a barrel. However, by
the time of publication the slump had eased, with Brent trading
at $58.47 a barrel and WTI standing at $52.65 a barrel.

The final round of talks between Tehran and P5+1 group (the US,
Britain, France, China, Russia and Germany) is currently underway
in Vienna.

Iranian Foreign Minister Javad Zarif at a meeting with Chinese
counterpart Wang Yi on Monday said he hoped the talks between
Iran and the P5+1 group of international mediators” will not
be extended anymore,” a representative of the Iranian
delegation told TASS.

"The talks are now at the key stage, but problems still
remain," Aragchi said.

"I hope we are finally entering the final phase of these
marathon negotiations. I believe it," said French Foreign
Minister Laurent Fabius, who cancelled a trip to Africa to stay
at the talks in Vienna.

Iran’s 20-30 million barrels of crude in storage are estimated to
be some of the largest reserves in the world, and if a deal is
signed, that could further push down the price of oil.

Some analysts say it would take until 2016 before Iran could
return to full-scale exports. However, they estimate an increase
of around 200,000 barrels per day in exports in the short-term,
adding to a current surplus of about 2.6 million barrels a day.

Iranian oil exports have more than halved to about 1 million
barrels per day (bpd) since 2012 as a result of EU and US
sanctions over the country’s nuclear program.

A final comprehensive agreement on the Iran was originally
expected to be reached by June 30 but the negotiating process has
been extended until July 7.

On March 31, Iran and six major world powers have managed to
reach a preliminary agreement on ‘all the key aspects’ of a deal.

A final deal is to insure that Iran would not try to produce a
nuclear weapon in exchange for the lifting of international
sanctions. Tehran insists that it’s not pursuing a nuclear
capability, but some nations have accused it of having a military
nuclear program.